WATER AFFAIRS AND FORESTRY
WATERWESE EN BOSBOU
METSI LE DIKGWA
ZAMANZI NEZAMAHLATHI
- 2 -
Expenditure 2002/2003
The 2002/2003 expenditure is shown in Table 1, where the allocation for the three different functional areas as well as the support function are indicated. Although the Adjustment Estimates have been made, it is expected that further minor adjustments will still be made when the books are finally closed at the end of the financial year.
TABLE 1: Expenditure 2002/2003 (Amounts in million)
|
Adjusted Appropriation |
Expected |
Deviation |
Water Resources Water Services Forestry |
R’000 |
R’000 |
R’000 |
Total |
3 762 691 |
3 740 446 |
22 245 |
Apart from the Exchequer Account, the Department also operates two trading accounts, the Water Trading Account and the Equipment Trading Account. In these trading accounts expenditure is offset against revenue and in the case of a deficit, augmentation is made from the Exchequer Account. Information on expenditure and revenue at financial year end is given below:
2002/2003 Budget (R million)
Trading Account Expenditure Revenue Deficit/Surplus
Equipment 31 917 49 077 17 160
Water 2 933 271 1 838 601 (1 094 670)
The Department has transferred the water services projects from the former administrations into the Water Trading Account. Currently cost recovery on these schemes is very low and this is the reason for the deficit shown above.
Budget 2002/2003 to 2005/2006
The Medium Term Expenditure Framework (MTEF) Budgetary allocation for the three years for the three main functional areas and administration (which is considered as an overhead) is given in Table 2. For convenience the 2002/2003 allocation is also shown. A more detailed breakdown per budget programme is given in Table 3.
- 3 -
TABLE 2: Exchequer Account: Budget 2003/04 to 2005/2006
Functional area |
2002/2003 |
2003/2004 |
2004/2005 |
2005/2006 |
Water Resources Water Services Forestry |
R’000 |
R’000 |
R’000 |
R’000 |
Total |
3 762 691 |
4 086 543 |
3 654 366 |
3 953 535 |
Percentage (%) change from previous year |
|
|
|
|
Reasons for significant changes from 2002/2003 to 2003/2004 in the various functional divisions are given below. Inflation and improvements of service conditions account for much of the increases.
Programme 1: Administration: Increase R11,154 million
The allocation to Administration increases by 5,7 per cent a year over the medium term, having grown by an average of 7,3 per cent a year between 1999/00 and 2002/03. The increase reflects the increase in the costs of IT management and restructuring.
Programme 2: Water Resources Management: Decrease R105,372 million
Expenditure on Water Resources Management increases by about 28 per cent between 1999/00 and 2002/03 as a result of the implementation of National Water Act, particularly in relation to resource information management, licensing, improving water quality and building water resources (in partnership with neighbouring states like Swaziland). However, expenditure on this programme will decrease by about 9 per cent in 2003/04 and by 27 per cent in 2004/05 as the poverty relief allocations for Working for Water will cease to exist pending the review of the entire poverty relief programme.
Programme 3: Water Services: Increase R465,567 million
Expenditure between 1999/00 and 2002/03 on Water Services has increased by about 7 per cent, driven by the urgency to eradicate the backlog in basic water services, and especially the need to speed up the delivery of basic sanitation. Expenditure will increase by about 24 per cent in 2003/04 due to the refurbishment of water schemes to be transferred to local authorities, and the acceleration of the delivery of sanitation and basic services. In terms of government policy, the capital grant should be transferred to Department of Provincial and Local Government in 2004/05.
Programme 4: Forestry: Decrease R47,497 million
The allocation to Forestry will decrease by an average of 2,2 per cent a year over the medium term as state-owned forestry assets are restructured.
- 4 -
In 2002/03 the Industrial Plantations Trading Account ceased to operate, and the costs of managing state-owned forestry enterprises were brought onto the budget. Spending is expected to decrease over the MTEF period, but due to the human resource costs involved in of restructuring (VSP’s etc.) it increased during 2001/02. There has also been a shift in expenditure towards community and indigenous forestry management to compensate for past underfunding, and to cover the costs of staff redeployed to these functions.
Geographic distribution
The geographic distribution per Province of the Department’s budget andWater Trading Account is shown in Table 3 below.